John chose to buy a pizza. If he had not bought the pizza, he would have bought either a hot dog or a hamburger. John's opportunity cost of buying the pizza is
A) the hot dog.
B) the hamburger.
C) both the hot dog and the hamburger.
D) whichever alternative, the hot dog or the hamburger, has the next highest value to John.

Question

Quizplus · Accepted Answer

Opportunity cost is the value of the next best alternative foregone as a result of making a decision. In this case, it's whichever option between the hot dog and the hamburger John values more, since he can only choose one of them if he didn't buy the pizza.

John Chose to Buy a Pizza